Stinger Missiles And Shady Deals: Ex-Biz Partner To Trump Has A Tall Tale To Tell

In December 2015, an Associated Press reporter asked Donald Trump why he had appointed Felix Sater, a man who’d been convicted for stock fraud, his senior advisor. “Felix Sater, boy, I have to even think about it,” Trump told the AP. “I’m not that familiar with him.”

The feeling is not mutual.

“My last Moscow deal [for the Trump Organization] was in October of 2015,” Sater recalled. “It didn’t go through because obviously he became President.” Sater had told the New York Times that he was working on the deal that fall, but over the course of several conversations with TPM, he gave a slightly more detailed timeline.“Once the campaign was really going-going, it was obvious there were going to be no deals internationally,” Sater said. “We were still working on it, doing something with it, November-December.”

That deal was for “The Trump Tower, to develop in Moscow.” It was a similar proposition to the one Trump himself tried to broker with the Agalarovs, a family of vastly wealthy Russian oligarchs who brought Miss Universe 2013 to Moscow and were behind the infamous 2016 Trump Tower meeting between the President’s oldest son and an attorney said to work for the Russian government.

Sater said he never worked with the Agalarovs on a Moscow deal for Trump: “I don’t work with them and I’ve never worked with them.” When asked who he was working with, Sater chuckled. “A couple of people I’d like to continue working with, and that’s why I don’t want their names in the newspaper. People say, ‘I care about you and love you but why do I need my name in the press?’”

The Trump Organization did not respond to multiple requests for comment from TPM. But to understand Trump and the type of people his real estate empire did business, it’s worth trying to understand Sater, the Russian-American émigré whose connections span not only the worlds of Russian and Italian organized crime—which Sater said are in part a result of not being able to find legitimate work after two criminal convictions—but the FBI and, now, the presidency.

South Brooklyn tough

Sater is from the Brighton Beach and Coney Island neighborhoods of Brooklyn, an area with large populations of both first-generation Russian-Americans and multigenerational African-American families. It’s a vital part of the $200 million real estate business Trump took over from his father in 1974, which in turn seeded his own wealth. Rather than benefiting from shrewd dealmaking for hotels and casinos, as the President likes to suggest, Trump built his real estate empire on his hereditary residential businesses, accrued by his father through the construction, purchase and management of residential buildings, many of them inhabited by Russian-Americans like Sater.

The Trumps were already notorious: Donald and his father, Fred Trump, allegedly preferred to rent to white families and subsequently found themselves “charged with discrimination” in “a number of local actions against us,” he told the Times in 1973 when he settled discrimination charges in Coney Island, among other areas of the city. Sater would surely have been familiar with the Trumps when, renting an office with his partner Tevfik Arif for their real estate firm Bayrock, he approached Trump personally in “2000, 2001,” by his recollection.

After high school, Sater went to Pace University, at the foot of the Brooklyn Bridge—but now he was on the Manhattan side. When he graduated he worked for prestigious financial outfits like Bear Stearns and Gruntal & Co. In 1991, Sater got into a bar fight with a fellow Wall Streeter that ended with Sater stabbing the other man in the face with a margarita glass. The injured man needed 110 stitches and suffered nerve damage; Sater went to prison for a year, which he described as “the worst time in my life.”

“Yes, I got into a bar fight. Yes, the instance at which I hit the man with the margarita glass…” he broke off. “I didn’t break it and try to carve my initials into his face. It was a bar fight. That’s all it was. I made the mistake of going to court, lost, went to jail over it, got involved in a dirty, scammy Wall Street deal [with former Gruntal colleague Salvatore Lauria]. I did.”

As far as Sater is concerned, he’d done his time. But like most people who have been to prison, his punishment seems not to have ended. “Everybody’s making it sound like I’m Tony Soprano,” he sighed.

Sater and Lauria gained control in 1993 of White Rock Partners, a business that would go on to become intertwined with the Italian mafia because, Sater said, he owed his lawyer: “When I came out, I was released on appeal bond, I couldn’t do anything I needed to pay my lawyer $100,000 to keep me out on appeal.” His only professional skill was bond trading, but he was legally barred from doing that at a legitimate business—so he started another kind of business. “I’m not some poor little lamb,” he admitted.

Indeed not: The firm, which was renamed State Street Capital, would go on to steal some $40 million. Court documents accuse State Street of targeting “little old ladies;” Bloomberg reported in June that a number of the victims were also Holocaust survivors. Sater denied knowing this about the people his firm fleeced.

“I gave them the coordinates”

A strange thing happened after Sater’s second arrest, however: He did not go to prison. Instead, in 1998 he signed an FBI cooperation agreement that was approved by Andrew Weissmann, who is now part of the legal team investigating Russia’s interference in the 2016 election under Special Counsel Robert Mueller. Sater appears to have forfeited not his share of the $40 million, but a $25,000 fine and a house in the Hamptons.

Sater had been in Russia working for AT&T when he heard that the FBI was looking for him, according to a heavily redacted court transcript—which refers to Sater as “Felix Slater”— obtained by legal reporter Daniel Wise. No one had been prosecuted in the State Street scam by 1998, but with Sater’s help 20 people “at various levels of that operation, ranging from the brokers to the people who were transferring money” were prosecuted, according to the documents. The government described Sater’s cooperation as “exemplary.”

The FBI’s glowing testimonial isn’t a patch on claims made by Lauria in his book, which he later disavowed as a work of fiction. Lauria and co-writer David S. Barry wrote that Sater had tried and failed to purchase black-market Stinger missiles in Afghanistan.

Sater makes impressive claims, too: TPM asked him if he’d returned his share of the State Street money. He said, “Because of national security issues I can’t discuss anything other than one part of it: You understand that I was given a $25,000 fine, and it’s not because of Vinnie Boombatz from Brooklyn?”

Attorney General Loretta Lynch, Sater noted, had publicly defended him in her confirmation hearing, and she had used the phrase “national security.”

“When she was talking about national security, she wasn’t talking about Stinger missiles,” he said. “She was talking about our country’s biggest enemy who killed over 3,000 people. How ‘bout the first time Bill Clinton bombed his camps, I provided the coordinates?”

Sater appeared to be referring to Operation Infinite Reach, a cruise missile launch based on CIA intelligence against Osama bin Laden’s camps in Afghanistan—where Sater had sought the missiles—and Sudan. Sater wouldn’t say more.

Sater told the Los Angeles Times he spent the late ’90’s “hunting bin Laden”; the Stinger missile episode was also attributed to the CIA in Lauria’s book. The CIA declined comment, but a source familiar with the intelligence community’s use of civilian assets told TPM that claim is wildly unlikely: Anyone considered for work directly with the CIA would almost certainly be immediately be disqualified by the criminal record Sater deplores and has tried to escape.

It’s theoretically possible for Sater to have provided information that was communicated to the CIA by the FBI, the source said. It’s even possible that the information was correct: The August 20, 1998 Al Qaeda meeting was “not much of a secret,” Steve Coll writes in his book about the CIA in Afghanistan, “Ghost Wars.” But if Sater told the agency more, the fact that it came through the FBI and not the CIA’s own sources might have limited its use within the intelligence community. The FBI’s national press office declined to comment to TPM.

“The biggest, scummiest gangster”

Sater’s two arrests often have been presented as exhibit A in the case against the President’s 15-year association with the man, but Trump has been defensive of the relationship even while distancing himself from it.

When pressed in 2013 by the BBC’s John Sweeney about whether he should have cut ties with Bayrock because of its association with Sater, Trump told Sweeney, “John, maybe you’re thick but when you have a signed contract, you can’t in this country just break it.” He added, “Sometimes we’ll sign a deal and the partner isn’t as good as we’d like.” In a deposition that same year, Trump denied knowing what Sater looked like.

That halfhearted defense is more than Sater usually gets. Like many ex-cons, he is understanding of people who pretend not to know him: He said his involvement in Bayrock was kept secret because of his “bad past.”

The Bayrock Group is the subject of much legal scrutiny. One suit filed by Bayrock’s former CFO Jody Kriss flatly describes Bayrock as a money laundering operation; it also alleges that the firm defrauded investors by not revealing Sater’s felony convictions. That’s what eats at Sater. He doesn’t understand why the past can’t be past. Re-opening those wounds, he said, is the worst sin of all. “The biggest, scummiest gangster I’ve met is Jody Kriss,” he told TPM on several occasions. Kriss, he said, wanted to out him for testifying against mobsters.

Sater’s way of thanking people who have helped him is not to tell reporters their names. He told TPM a mentor had helped him find work in real estate, outside the Wall Street world where he’d been barred from working. Like his Russian connections, Sater wouldn’t name this man, who he described as “a serious real estate guy.”

The other serious real estate guy in his Rolodex—the President—has gone from being his employer to being the most powerful man in the world. Sater has approached the Trump administration since the election, but that has been through Michael Cohen, another man with deep ties to the former Soviet bloc and New York real estate, who Sater has known since the pair’s teenage years.

What’s it like to know the President personally? “That and a token will get me a ride on the subway,” Sater said ruefully. “If it was in Russia, he’d give me a billion dollar contract and I’d be wealthy.”

Sam Thielman
Sam Thielman is an investigative reporter for Talking Points Memo based in Manhattan. He has worked as a reporter and critic for the Guardian, Variety, Adweek and Newsday, where he covered stories from the hacking attacks on US and international targets by Russian GRU and FSB security services to the struggle to bring broadband internet to the Navajo nation. He lives in Brooklyn with his wife and son and too many comic books.